Trust accounts play an important role in protecting funds held by real estate businesses and ensuring they meet their regulatory obligations. But not all real estate trust accounts are subject to the same requirements.
The type of trust account a business operates determines the legislation that applies, the audit requirements it needs to meet and the way those obligations should be managed.
In this article, we look at the main types of real estate trust accounts and highlight the key audit and compliance considerations for each.
Overview of real estate trust account types
Real estate agencies may operate different types of trust accounts depending on the services they provide. The regulatory and audit requirements vary depending on the nature of the funds being held and the activities undertaken by the business.
Trust Account Type |
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Regulatory Body |
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Relevant Legislation |
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Audit Requirements |
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| Sales Trust Account | REA | Real Estate Agents Act 2008; Real Estate Agents (Audit) Regulations 2009 | Annual audit by a qualified auditor, including at least three trust account examinations per year and submission of an annual audit report to the REA. | |||
| Licensed Property Management Trust Account (Commercial) | REA | Real Estate Agents Act 2008; Real Estate Agents (Audit) Regulations 2009 | Annual audit by a qualified auditor, including at least three trust account examinations per year and submission of an annual audit report to the REA. | |||
| Business Broker Trust Account | REA | Real Estate Agents Act 2008; Real Estate Agents (Audit) Regulations 2009 | Annual audit by a qualified auditor, including at least three trust account examinations per year and submission of an annual audit report to the REA. | |||
| Property Management Trust Account (Residential) | Residential tenancy legislation (not REA trust account regime) | Residential Tenancies Act 1986 | Audit requirements may be imposed by franchise requirements or business policy. |
Key considerations for business owners
The most significant distinction is that sales, licensed commercial property management, and business broker trust accounts are regulated under the Real Estate Agents Act 2008 and are subject to the REA’s prescribed trust account audit framework.
In contrast, residential property management businesses are generally governed by the Residential Tenancies Act 1986 and related legislation. However, there is no equivalent statutory trust account audit regime comparable to the Real Estate Agents (Audit) Regulations 2009. Audit requirements may arise through franchise arrangements, company policy, or contractual requirements.
This distinction is important when determining governance responsibilities, compliance obligations, audit planning, and risk management arrangements within a real estate business.
Understanding which requirements apply to your trust account is an important part of managing compliance and reducing risk. The requirements can differ depending on the type of service your business provides and the nature of the funds being held.
For further guidance, see the Real Estate Authority’s information on trust accounts.
If you are unsure which requirements apply to your business, or would like to discuss your trust account audit requirements, the BVO Audit team can help.
